10 March 2004, 09:55  Swiss franc firm vs euro after SNB rate comment

The Swiss franc opened firm against the euro on Wednesday but easier against the dollar after Switzerland's top central banker said Swiss interest rates won't stay at record lows indefinitely as the economy turns up. Tuesday's comments from Swiss National Bank Chairman Jean-Pierre Roth gave no clear sign on when the SNB might start nudging its key rate target higher, but economists generally think it can leave rates low for months given tame inflation. "His comments that actual borrowing costs have been put in place at a time when economic conditions in Switzerland and around the globe were substantially less clear than today -- also mentioning the by-now improving Swiss economy -- had some investors slightly adjusting their Swiss franc rate expectations," UBS said in its daily markets bulletin. "At this stage, however, the big swings in Swiss money market rates are unlikely to take place unless there is a major shift in perception with respect to the international interest rate outlook." The euro eased to 1.5772/77 francs from 1.5795/5800 late on Tuesday in Europe. After an overnight rally, the dollar had advanced to 1.2821/26 francs from 1.2737/42 late on Tuesday, well below a three-month high of around 1.3075 francs seen last week. UBS said technical charts indicated the euro's long-term uptrend against the franc remained intact for the time being, although its failure to hold highs above 1.5806 francs may signal it is peaking. UBS kept its one-month target for the euro at 1.5600 francs, noting the euro may follow the pound lower against the franc.///

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